PUTRAJAYA should intensify the promotion of products made in Malaysia as part of its economic stimulus package to be announced on February 27 to mitigate the economic impact of the Covid-19 outbreak, said manufacturers.

Federation of Malaysian Manufacturers (FMM) president Soh Thian Lai said this will create robust and sustainable domestic market demand for Malaysian-manufactured products.

“This will, in turn, strengthen the capacity and capability of the domestic manufacturing industry, which, in turn, enhances efforts to build brand integrity in export markets.”

He said the government should also conclude trade agreements that allow easier access to Malaysian products in overseas markets.

“Malaysia should conclude the Regional Comprehensive Partnership Agreement and implement free trade agreements that have been signed, such as the Comprehensive and Progressive Agreement for Trans Pacific Partnership, to provide market access for Malaysian exporters.”

He also suggested that the government remove the RM300,000 ceiling imposed by the market development grant to encourage more Malaysian SMEs to take part in international export promotion activities and explore more markets.

He urged the government to reinstate a brand promotion grant that was introduced in 2003 but has since been suspended.

“This will develop and promote Malaysian-owned brand names in overseas market.”

On Friday, Finance Minister Lim Guan Eng had said Prime Minister Dr Mahathir Mohamad would announce the government’s stimulus package on February 27.

The package is aimed at mitigating the economic impact of the Covid-19 outbreak on Malaysia, and preserving the welfare of the people.

He had said assistance would be given to affected sectors to allow the economy to emerge as whole as possible and benefit from the expected economic rebound post-Covid-19.

“The government will adopt measures to assist these companies, but emphasis should also be placed on exploring alternative revenues, such as shifting towards encouraging domestic tourism and sourcing from other markets.

“This also involves keeping the domestic labour market resilient while ensuring our soft and physical infrastructure remain in place amid the short-term weakened demand,” Lim had said.

Also Friday, Deputy Prime Minister Dr Wan Azizah Wan Ismail had said the economic stimulus package would also focus on domestic tourism development.

She had said the government was working on the best package to boost the sector, one of the hardest hit by the Covid-19 outbreak that began in China.

Raw material supply disruption

Meanwhile, Soh said the Covid-19 outbreak is expected to negatively impact the manufacturing sector in Malaysia, as the industry is reliant on raw materials from China.

“Given the close links with China’s global supply chain, manufacturers that are export-oriented and rely heavily on Chinese demand, and those that import their raw materials from China are largely expected to be significantly affected.

“Based on initial feedback received from FMM members, there is currently a low supply of raw materials sourced from China.”

He said imports of these raw materials are affected as some Chinese cities are currently under lockdown and production has been stopped.

Similarly, exports to China are affected as most importers are affected by the Chinese government’s shutdown directive.

He said the government’s economic stimulus package will help to minimise challenges faced by the manufacturing, tourism and construction sectors, and support overall economic growth. – February 16, 2020.